How Much Can You Comfortably Afford to Pay for a Car?

Posted Tuesday, Sep 16, 2014 by nhtwpprod

Toyota Camry at North Hollywood Toyota

Choosing the style and color of your next vehicle is just
one of the decisions you will make to determine if you are happy with your
choice during the time you will have it. When it comes to price, people often
fail to look at the big picture before making their choice. They think that if
they receive an
offer for a Los Angeles car loan
through the mail that promises low
interest rates and great terms, they must have all the qualifications needed to
buy the most expensive car on the lot. It is important to take time to look at
your financial situation, including the details that don’t go on your
application, to decide between a brand new luxury car or a certified used
Toyota that has more reasonable payments.

Making a Calculated
Decision

Regardless of which member of your family a vehicle is for,
how it will be used, or how many other vehicles you have, a vehicle is a major
purchase. It is also one that few people will have to make without getting a
car loan and making monthly payments. Even if you find a vehicle that has
reasonably low payments, the cost of driving the car should also be considered.
Bigger cars with larger motors take more fuel, and some have a lot more repairs
made to them, on average. There are also some makes and models that cost a
great deal more to maintain and repair.

Purchasing a certified used Toyota is a good way to get a
good car for less money. Although any used car is likely to need repairs before
a new model, Toyota vehicles are more durable, over all. That means that, in
comparison, a similar model vehicle in a different make is more likely to need
repairs before a Toyota will.

How Much Should You
Spend?

While these are all considerations that should go into your
overall decision about which vehicle to buy, you need to have a budget with an
absolute maximum you can pay, without sacrificing from other important
expenses. Using the payment calculator is a great way to determine how much a
car will cost each month, but it doesn’t give you a realistic idea of what you
can afford to pay.

The rule of thumb typically considered is that you should
not spend over 20% of your monthly income on your car payment. This amount is
based on take-home pay, and it should include all of your expenses, including
insurance, parking charges, gas, maintenance, etc.

Get It All on Paper

Before you start to shop for a new car, put everything down
on paper. Include all of your monthly payments, and those that only occur
quarterly or annually. Otherwise, you may forget some of the expenses that you
have coming up that could put an added burden on your finances. College
tuition, property taxes, and other large expenses should be considered in the
overall picture. After looking at what you know you can easily afford, turn to
the car payment calculator to see what kind of vehicle fits in your budget. Also,
turn to North Hollywood Toyota to assist with your Los Angeles car loan, to
ensure you get the best possible terms. To learn more, call us at 800-800-6730.